Barry Silbert, founder and CEO of Digital Currency Group (DCG), has recently caught the attention of some market regulators due to possible violations of US securities laws.

Buying in to Ethereum Classic early and his continuous promotion of the currency may put him in hot water from regulators. Silbert bought into the unforked version of Ethereum around $0.50 a coin, which currently trades around $33, but has an all-time high of almost double this.

Charles Chancellor-Mackay picks apart every single detail of the connection between the Digital Currency Group, its CEO, and Ethereum Classic in a post entitled ‘Barry Silbert and the Cost of Bitcoin’s Malfeasance Culture,’ starting from the beginning:

“[After Poloniex’s ETC listing on Jul. 24, 2016]… Barry would later claim to have bought ETC at $0.50, which suggests he bought it before Poloniex listed. This would suggest that Barry at least knew about the listing in advance and profited accordingly.”

Furthermore, the outlets of online publication CoinDesk and cryptocurrency exchange BTCC, of which DCG is the main investor in both companies, were supposedly used for the purpose of hyping the altcoin. Although no explicit price predictions were given, the CEO did state the risk-return ratio felt right at $0.50:

Bought my first non-bitcoin digital currency…Ethereum Classic (ETC)

At $0.50, risk/return felt right. And I’m philosophically on board

— Barry Silbert (@barrysilbert) July 25, 2016

More recently, Reuters highlighted the communication between Silbert and a trader known an “Sinz,” where Silbert told the trader to close out of shorts preceding an “Ethereum Classic Summit.”

While it is unclear if that trader or anyone else took action in accordance to Silbert’s word, we do know that price of ETC was $14 when the tip was given, and surged to $20 after the two-day summit, buoyed by daily trading volumes exceeding $1 billion.

“If you have a fund that is issuing a security and the value of the security rises and falls with the price of a cryptocurrency and you are telling people to close their shorts in that cryptocurrency, that is a problem.”

Grayscale, the subsidiary of DCG which manages the investment funds of BTC, ETC, and ZEC and whom Silbert is the Chief Executive of, also saw it shares soar before the conference.

Grayscale launched the accredited-investors only Ethereum (ETC) Investment Trust in April 2017 and continues to hold positions in the cryptocurrency, as well as donating a portion of the fees to further development of the underlying technology. It also holds positions in zcash as well as bitcoin to offer exposure to cryptocurrencies without forcing investors to actually hold them.

This fact is what could put Silbert in the scrutiny of US securities laws, as the cryptocurrency itself is not defined as a security, but the investment fund, which manages more than $3 billion in assets, fits the definitions of a security very well.

However, the US Commodity Futures Trading Commission classifies cryptocurrencies as commodities, and therefore can “police the virtual currency market for manipulation and other misconduct.” Combined with the rising regulations and the flow of institutionalized money into cryptocurrencies, there is the chance of possible reprimand from authorities.